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Montenegro Country Report BTI 2010

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Montenegro Country Report BTI 2010 BTI 2010 | Montenegro Country Report Status Index 1-10 7.35 # 25 of 128 Democracy 1-10 7.80 # 27 of 128 Market Economy 1-10 6.89 # 32 of 128 Management Index 1-10 6.19 # 27 of 128 scale: 1 (lowest) to 10 (highest) score rank trend This report is part of the Transformation Index (BTI) 2010. The BTI is a global ranking of transition processes in which the state of democracy and market economic systems as well as the quality of political management in 128 transformation and developing countries are evaluated. The BTI is a joint project of the Bertelsmann Stiftung and the Center for Applied Policy Research (C•A•P) at Munich University. More on the BTI at http://www.bertelsmann-transformation-index.de/ Please cite as follows: Bertelsmann Stiftung, BTI 2010 — Montenegro Country Report. Gütersloh: Bertelsmann Stiftung, 2009. © 2009 Bertelsmann Stiftung, Gütersloh BTI 2010 | Montenegro 2 Key Indicators Population mn. 0.6 HDI 0.83 GDP p.c. $ 12486 Pop. growth % p.a. -0.1 HDI rank of 182 65 Gini Index - Life expectancy years 74 UN Education Index 0.89 Poverty2 % - Urban population % 60.5 Gender equality1 0.32 Aid per capita $ 176.7 Sources: UNDP, Human Development Report 2009 | The World Bank, World Development Indicators 2009. Footnotes: (1) Gender Empowerment Measure (GEM). (2) Percentage of population living on less than $2 a day. Executive Summary During the two-year period under consideration, Montenegro showed progress in its transition process. It made big steps toward Euro-Atlantic integration. In May 2007, Montenegro became a full member of the Council of Europe. On 15 October 2007, Montenegro signed a Stabilization and Association Agreement (SAA) with the European Union and its member states. The SAA provisions on trade liberalization entered into force in January 2008. In December 2008, Montenegro’s government applied for EU membership. Internally, the country has demonstrated progress in consolidating its democratic institutions by adopting a new constitution on 19 October 2007. The governing coalition led by Prime Minister Milo Djukanovic’s Democratic Party of Socialists (DPS) was confirmed in office in the early parliamentary elections held on 29 March 2009. Together with the Social Democratic Party (SDP) and a Croatian as well as a Bosniak minority party, the DPS controls an absolute majority in parliament. The Djukanovic government has sought to design and implement policy reforms aimed at aligning the political and economic system with European norms. Nevertheless, the country’s transition to democracy faces some important challenges. Polarized relations between a governing party in power for more than a decade and a fractured opposition have jeopardized much-needed compromises on many reforms. National identity issues related to citizenship and organized religion, along with the rights of ethnic minorities, continue to dominate political discourse even after the adoption of the new constitution. The inclusion of civil society groups into the policy-making process remains weak. The new constitution provides the basis for a civic nation state with full political, civil and human rights on the basis of the rule of law. The preamble names as citizens the Montenegrins and the representatives of minority groups. Furthermore, the new constitution provides for an 81- member parliament that elects a prime minister, while the president is elected by popular vote. The constitution was adopted in parliament by 55 out of 81 members of parliament – that is, by a BTI 2010 | Montenegro 3 two-thirds majority. After a long period of negotiations, the Movement for Changes (PzP) led the way, together with Bosnian and liberal parties, in providing a high degree of consensus for the constitution. The law on the implementation of the constitution set a timetable for the adoption of new laws and the amendment of existing laws in line with the new constitution. This presents a big challenge in terms of legislative work for the government and parliament. One of the arguments of the Montenegrin government before the referendum on independence was the acceleration of the EU integration process after its dissociation from Serbia. The developments in this field appear to confirm the government’s view: When it comes to integrating into European structures, the period under review was much more successful for Montenegro than for Serbia. History and Characteristics of Transformation The final decade of the 20th century was extremely turbulent and traumatic for Montenegrin citizens, as it was for all those living in Southeastern Europe and the Balkan region. The toleration for and emergence of political pluralism in the Socialist Federative Republic of Yugoslavia (SFRY) and its six constituent republics brought political elites into power who instrumentalized nationalist ideologies and stereotypes to advance their nation-state projects. Irreconcilable aims and nationalist mobilization led to the collapse of the federation and the emergence of Bosnia and Herzegovina, Croatia, Macedonia and Slovenia as independent states. In Bosnia and Herzegovina, Croatia and Slovenia, wars of varying durations and intensities began when the Yugoslav National Army attacked the republics in order to assist the rebellions of ethnic Serb communities in Bosnia and Croatia against the secessions. The wars involved neighbors and people that had been born and lived together in the same country for many years. Suddenly, friendships disappeared, families were broken up and diverted from a basic, honest and community-based lifestyle into a variety of activities not previously countenanced. Many have migrated to safe havens elsewhere. For those who remained, and especially the young, the trauma of the unfolding events and images of the war in the Balkans remains vividly in their minds as mental wounds. Montenegro was the only republic of Yugoslavia that preferred to remain part of a joint state with Serbia in the early 1990s. This policy was not only advocated by the post-communist political elite that had won the first democratic elections, but it was also supported by a substantial part of Montenegro’s citizens, who felt closely associated with the Serbian nation. In 1992, Montenegro and Serbia established a Federal Republic of Yugoslavia (FRY) to succeed the SFRY. While the constitution of the FRY envisaged parity between Montenegro and Serbia in federal institutions, the common state was de facto dominated by Serbia both economically and politically. Facilitated by the wars and nationalist mobilization, Serbia’s then-president, BTI 2010 | Montenegro 4 Slobodan Milosevic, was able to establish a semiauthoritarian system that included Montenegro and kept him in power until 2000. His regime was based on clientelist networks within the state administration, police, military and the state-dominated economy, all of which enabled him to exercise control over the electronic media, skillfully falsify elections and, thereby, engender the effective fragmentation and isolation of the political opposition. These methods enabled him to control the Democratic Party of Socialists and political leadership in Montenegro. With the election of the reform socialist politician Milo Djukanovic as president in October 1997, Montenegro increasingly loosened itself from Serbian control and implemented reforms aimed at establishing a market economy. Economic reforms focused on openness, the protection of property rights and freedom of contract (including the protection of investors), implementing a credible currency (the euro), maintaining low levels of business regulations and taxation, implementing the rule of law and fostering entrepreneurship, private initiatives and innovations. In the wake of the Kosovo war, in August 1999, the Montenegrin government proposed to transform the FRY into a confederation of two states with independent foreign policies. As the Milosevic regime rejected this proposal and unilaterally abolished the equal representation of Montenegro in the federal parliament, Montenegrins boycotted the federal presidential and parliamentary elections in September 2000. After the fall of the Milosevic regime, Montenegro and Serbia negotiated a loosely integrated “state union” to replace the FRY. The talks were mediated by the European Union, which feared the destabilizing effects of another disintegrating state in the Balkans. Whereas the Montenegrin government wanted to establish an independent state, the Montenegrin opposition parties and most parties in Serbia preferred to preserve the common state framework. The negotiations led to an agreement in 2002 and a constitutional charter in 2003, which defined the state union and its institutions. The agreed aims of the union were accession to the European Union and the creation of an internal market in accordance with EU principles and standards. The state union’s powers were essentially limited to the enforcement of international law, cooperation with international courts and issues related to military and defense, standardization, intellectual property rights, statistics, borders, asylum, immigration and visas. To accommodate Montenegrin interests, the constitutional charter of the state union envisaged the option of an independence referendum held three years after the creation of the state union. The referendum was organized on the basis of this provision. BTI 2010 | Montenegro 5 Transformation Status I. Democracy 1 | Stateness The state’s monopoly on the use of force covers the entire territory. Police and Monopoly on the military
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